NORTHROP GRUMMAN CORPORATION

NORTHROP GRUMMAN CORPORATION PURCHASE ORDER TERMS AND CONDITIONS (TOOLING - BOEING 747 PROGRAM, HAWTHORNE) 1. DEFINITIONS. A. ACCOUNTABLE TOOLING is tooling title to which rests with The Boeing Company. Boeing retains rights of use and/or transfer of this tooling, depending upon the applicable terms and conditions of the Purchase Order which acquired the tools. B. BUYER means Northrop Grumman Corporation. C. CUSTOMER means The Boeing Company, unless otherwise specified. D. SELLER means the party with whom Buyer is contracting. E. BUYER OR CUSTOMER TOOLING means all Accountable Tooling owned by or acquired by Buyer or Customer under the terms of this Order including Seller acquired or Buyer or Customer furnished Tooling. F. BUYER OR CUSTOMER FURNISHED TOOLING means Accountable Tooling in the possession of or directly acquired by Buyer or Customer and subsequently made available for use in the performance of this Order. G. SELLER-ACQUIRED TOOLING means Accountable Tooling fabricated, acquired or otherwise provided by Seller for the performance of this Order and to which the Customer has title. H. SPECIAL TOOLING (ST) means jigs, Numerical Control (N/C) Software, dies, fixtures, molds, patterns, tapes, gauges, other equipment and manufacturing aids, all components of these items, and replacement of these items, which are of such a specialized nature that without substantial modification or alteration their use is limited to the development or production of particular supplies or parts thereof or to the performance of particular services. This does not include material, Special Test Equipment, facilities (except foundations and similar improvements necessary for installing Special Tooling), general or special machine tools, or similar capital items. I. SALVAGE means property that, because of its worn, damaged, deteriorated, or incomplete condition or specialized nature, has no reasonable prospect of sale or use as serviceable property without repairs, but has some value in excess of its scrap value. J. SCRAP means property that has no value except for its basic material content. 2. SELLER TOOL CONTROL SYSTEM APPROVAL. Seller shall establish written procedures, implement and maintain a Tool Control System which are fully compliant with all provisions herein. Seller may then initiate written request for Buyer's approval of Seller's Tool Control System which includes submittal of documents noted in Paragraph C below. Seller's approved Tool Control System shall be maintained by Seller in strict accordance with the procedures approved by Buyer. Buyer reserves the right to conduct periodic surveillance or otherwise review Seller's approved Tool Control System to assure compliance with the requirements of these Terms. A. Buyer will evaluate Seller's Tool Control System, identify any necessary changes thereto, or approve Seller's procedures and the implementation thereof. Buyer will notify Seller of Buyer's assessment of Seller's Tool Control System in writing. B. Buyer's approval of or acceptance of Seller's Tool Control System applies only to the specific Seller name and address identified in Buyer's written approval acceptance notification to Seller. C. One copy of each of the following must be submitted to Buyer. (1) Seller's current Tool Control procedures. (2) Sample of Seller's Tool record location document. (3) Sample of Seller's Tool maintenance record document. (4) Executed copy of Exhibit "A" "Certification of Receipt and Agreement - Tool Control" which is attached hereto and by this reference made a part hereof. PAGE 1 OF 7

(5) Document granting Government approval of Seller's Tool Control System, if available. (6) Other Tool Control documentation, as Buyer may request. 3. RECORDS. Accountability records and supporting documentation will be retained from the point of fabrication or receipt to final disposition. Manual or mechanized systems are acceptable for these records. Seller is responsible to ensure the following data are incorporated in the record system: A. Ownership and Purchase Order under which each tool was made; B. Nomenclature or description of item (tool name and usage) and make serial tool number; C. Boeing tool number and tool code plus the Boeing Lifetime Serial Number (BLTSN); D. Unit numbers received or fabricated (e.g. series and multiple-unit number); E. Packing sheet number and source from which tool was received or Purchase Order number on which tool was fabricated; F. Unit price; G. Inventory date and by whom; H. Tool rework records; I. Tool fabrication records showing Quality Assurance acceptance; and J. Disposition authority for tools no longer in Seller s possession. 4. CONTROL AND IDENTIFICATION OF TOOLING. A. Seller agrees to plan, manufacture, and control program tooling requirements and account for all tooling in accordance with the provisions of these Purchase Order Terms and Conditions and, in addition, Boeing documents D33200, "Boeing Suppliers Tooling Manual", D-33041, Revision F, "Boeing Tool Identification Codes" and D953W001 "General Operations Requirements Document for Suppliers" which are incorporated herein and by this reference made a part hereof, except as the same may be modified from time to time in accordance with this Order. Notwithstanding wording to the contrary within D33200, D-33041, and D953W001, all communication relative to the requirements of these documents shall be directed to Buyer's Procurement Representative whose name appears on the face of this Order. This requirement shall apply to Accountable Tools at all PAGE 2 OF 7 times prior to removal of such Accountable Tools by Buyer or delivery thereof to Buyer or a third party pursuant to paragraph 7 hereof. All tooling furnished to Seller will generally have been identified prior to delivery. Identification instructions are available from Buyer upon receipt of a request in writing from Seller. Seller must advise Buyer if upon receipt, property identification is different from the applicable transmittal/record documents. Seller will physically identify all Selleracquired tooling promptly upon receipt or fabrication. The tooling shall remain so identified as long as it remains in the possession or control of Seller. The identification process will ensure legibility and permanency. As a minimum, identification shall consist of: (1) Boeing tool identification number and identification code; (2) Tool make serial number and BLTSN; (3) Tool series and multiple-unit numbers. B. All tooling provided under this Order, including all Accountable Tools, shall be of a type and durability capable of supporting the entire production model program. Seller agrees to maintain or replace the tooling, including all Accountable Tools as required to support the manufacture and delivery of products to Buyer's Customer, at no additional cost to Buyer during the program life. C. No charge to this Order, either direct or indirect, will be made for the cost of lead, zinc, or kirksite used for Accountable Tools. If Buyer or Buyer's Customer takes possession of any Accountable Tooling made of such material, Buyer will reimburse Seller for the cost of such material used in such Accountable Tooling. D. Seller shall submit a Certified Tool List, for all Accountable Tools used in the production of Boeing 747 parts. Certified Tool Lists shall be in the format and in accordance with the instructions provided in Exhibit "B", with invoice for payment of Accountable Tooling. Four (4) copies of each Certified Tool List shall be required and shall be submitted within 30 days after tool proofing and completion of first lot of acceptable parts. Buyer reserves the right to approve tooling at Seller's facility.

Exhibit "B" is attached hereto and by this reference made a part hereof. E. Storage areas will be maintained according to sound business practices. Tooling will be protected from loss, damage, theft, or destruction and the elements, as necessary, while in storage and during transit. In no event shall the tooling be subjected to conditions which will tend to induce corrosion or damage from atmospheric conditions without adequate protection. Master tooling must be boxed and only be stored inside. Empty master tooling containers also must only be stored indoors. Tools transferred to Buyer, Customer or to another Seller shall be complete and operable after removal from storage. 5. TITLE. A. Title to all Accountable Tooling produced or acquired in connection with this Purchase Order shall pass to and vest in Boeing upon completion of manufacture and prior to any use. Such title shall thereafter be retained by Boeing for all purposes. Seller shall ensure that any subcontract for the production of Accountable Tooling provides for the passing of title to Boeing pursuant to the immediately preceding sentences. B. Seller shall not sell, assign, lease, transfer possession of, grant a security interest in, allow to be attached or seized on execution or otherwise, or in any other way dispose of or encumber any tools. C. Title to all tools used for the production of casting, forgings, and extrusions shall be retained by Boeing. 6. USAGE LIMITATION. All Accountable Tooling shall be used only in the performance of this Order and shall not be sold, leased, or otherwise disposed of except in accordance with paragraph 7 below. 7. BUYER DISPOSITION OF TOOLING. A. Seller shall submit to Buyer's Procurement representative a Tool Disposition Request (Exhibit C ) and provide all data required for determining disposition of inactive/excess tools. All Accountable Tools, whether originally furnished to Seller or produced or procured by Seller, shall be retained and disposed of in accordance with the provisions of the applicable Purchase Order and the PAGE 3 OF 7 instructions set forth below. All tools will be properly maintained and stored until formal disposition instructions are received from Buyer's Procurement representative. Under no circumstances shall Accountable Tools be scrapped without previous written approval or authorization from Buyer's Procurement representative. If the determination is made to dispose of the tooling in-place at Seller s location, Seller will perform the following: (1) Assemble all tools in a convenient manner for sale; (2) Remove all identification tags and/or obliterate all tooling identification prior to physical scrapping of tools; and (3) Dispose of or sell as scrap material as instructed by Buyer's Procurement representative. B. Except for forging dies, extrusion dies, and special tools made of lead, zinc, or kirksite, Buyer may at any time (including before or after any termination pursuant to this Order) for any reason, and in Buyer s discretion, (1) remove any Accountable Tooling from Seller s possession or, (2) require Seller to deliver any Accountable Tooling to Buyer or any third party, (3) direct Seller to use or not use any such Accountable Tooling or, (4) take any other action with respect to such Accountable Tooling that could be taken by the absolute owner thereof. C. Should Buyer elect to move any Accountable Tooling, Seller agrees to provide all assistance and support required by Buyer to permit such movement to occur in a timely manner that will support Buyer's production requirements. Seller further agrees the movement of Accountable Tooling will include any and all data such as tool planning and tool drawings which shall be delivered in a manner that will support Buyer's production requirements. If any action taken by Buyer pursuant to this paragraph B causes an increase in the cost of or the time required for the performance of any part of the work under this Order, Seller shall have the right to submit a claim to Buyer pursuant to the terms set forth in the "Changes" clause of this Order. D. Seller agrees that any schedule acceleration that is required by Buyer in order to provide for transfer of accountability to Buyer or to another

supplier shall be deemed to be within the scope of this Order for purposes of said "Changes" clause. Notwithstanding any other provisions of this Order (including before or after termination pursuant to the "Termination" clause) or normal industrial practice with respect to items such as forging dies, in the event procurement responsibility hereunder is transferred to a Buyer authorized subcontractor, Buyer or its designees shall retain the primary right to use all forging dies produced for use by Seller or its subcontractors, at any tier, under this Purchase Order. Forging dies shall be used only in the performance of this Purchase Order and such other Purchase Orders as Buyer may designate in writing, and such dies shall be retained for use in production of forgings until Buyer specifies in writing that a requirement for the use of such dies no longer exists. E. Seller will account for all tools until relieved of accountability by signed receipt of delivery by Buyer or any third party designated by Buyer or by other appropriate documented disposition. 8. TERMINATION DISPOSITION. Within one hundred and eighty (180) days following completion of this Order or termination or cancellation hereof in accordance with the "Terminations" clause, or such further period as may be agreed upon by the parties, Buyer shall furnish to Seller: A. Instructions as to the shipment of tooling either to Buyer, Buyer's Customer, or third parties; B. Directions to sell or dispose of as scrap, for the accounting of Buyer or Buyer's Customer, any or all of such tooling; C. Instructions as to preservation and storage of any or all such tooling; or D. Any combination of the foregoing. 9. LOT PROCUREMENT. Unless otherwise noted on the face of this Order, the tooling lot price includes all the tooling required to fabricate parts under this Order. If additional tooling is required to fabricate the part(s) purchased under this Order, the additional tooling must be identified to Buyer on a Certified Tool List and shall be furnished at no additional cost to Buyer. 10. INVENTORY. Seller shall perform annually and submit within sixty (60) days after notification, 100 percent physical inventory of Accountable Tooling and tooling records. Seller shall provide a signed statement on a Certification of Physical Inventory (Exhibit D ), that a physical inventory was completed on a given date and the records were found to be in agreement with the physical inventory, except as otherwise noted. 11. SELLER'S LIABILITY. A. RISK OF LOSS, DAMAGE OR DESTRUCTION. Seller shall bear the risk of all loss, damage, or destruction, regardless of when title may pass, to any Accountable Tooling until such time as the Accountable Tooling is disposed of as directed by Buyer or Buyer's Customer, permanently delivered to Buyer or Buyer's Customer, or otherwise permanently removed from Seller's possession and control at the direction of Buyer or Buyer's Customer. Seller shall maintain risk physical damage insurance on all Accountable Tooling, and provide evidence of such insurance to Buyer upon request. Seller warrants that the cost of any insurance related thereto is included in the price of the products acquired under this Order. Seller shall report to Buyer's Procurement representative all cases of loss, damage or destruction of Accountable Tools, as soon as the facts become known. Seller will provide the following to Buyer's Procurement representative, for each incident of loss, damage or destruction, regardless of the number of tools involved: (1) Identification and nomenclature of the lost or damaged tools; (2) Date lost or damaged; (3) Dollar value of tools and/or cost or estimated cost of repair or damage; (4) Applicable Purchase Order number; (5) Circumstances surrounding the loss or damage; and (6) Actions taken to prevent recurrence B. REPAIR OR REPLACEMENT. Seller will be responsible for repair or replacement of lost, damaged, or worn beyond use Accountable Tools to like new condition. Such repair shall be made without prior approval by Buyer and at no cost to Buyer. Replacement tooling requires submission of a Certified Tool List with a new BLTSN and the next available multi-unit number for each tool. These controlling records PAGE 4 OF 7

can be obtained through Buyer. Buyer inspection is required for all replacement tools. When a replacement tool has been accepted by Seller's inspection organization, the word "Scrap" will be stamped across the identification information on the replaced tool, and the scrapped tool will be submitted to Buyer's Procurement representative on a Tool Disposition Request (Exhibit C"). Disposition instructions will be provided as outlined in Condition 7., above. Cost for replacement of Buyer or Customer Furnished Tooling shall be established by negotiations. Tools shall be maintained in good repair, protected from corrosion, and in operable condition if recalled by Buyer or Buyer's Customer. C. Cost of preparation and packaging of all Accountable Tooling recalled by Buyer shall be Seller's responsibility. 12. TAXES. A. PAYMENT. (1) Seller shall make all declarations, file all returns and pay all present or future taxes imposed on Seller arising in connection with its effort under this Order except (a) sales or use taxes imposed on the sale of products to Seller for which Buyer has not supplied Seller with a valid resale exemption certificate, (b) property taxes levied on property, accountable and non accountable tooling to which Buyer or Buyer's Customer, or any of their affiliates has legal title, (c) Washington Business and Occupations (B&O) Tax, and (d) any other tax for which Buyer or Buyer's Customer, or any of their affiliates is or may become liable. Buyer shall reimburse Seller for any inventory or Washington Business and Occupations (B&O) taxes paid by Seller with respect to this Order. Seller shall make the declarations, file returns and make payments for applicable inventory or B&O taxes and Buyer shall reimburse Seller the value of the payment plus any amount provided in paragraph 12.C. (2) Notwithstanding item (b) above, Buyer may elect to have Seller pay applicable property taxes and reimburse Seller the value of the PAGE 5 OF 7 payment plus any amount provided for in paragraph 12.C below. (3) Buyer and Buyer's Customer represents that the production articles and spares purchased hereunder as well as any new tooling required for the manufacture of production articles and spares purchased under this Order are for resale and accordingly no sales or use taxes are applicable thereto. Boeing's California seller's permit number SS-OH-001106, Texas seller's permit number 1-91-425694-6, or Georgia seller's permit number 067-69-08263-3 shall apply. Seller will notify Buyer if a resale permit number is required for any other state. B. PRICE INCLUSIVE. All prices for products shall be deemed to include the amount of all taxes payable by Seller except as provided above. C. CONTEST. (1) In the event that any state or local taxing authority has claimed or does claim payment for sales or B&O taxes, Seller shall promptly notify Buyer, and Seller shall take such action as Buyer may direct to pay or contest liability for such taxes or to defend against such claim. The actual and direct expenses without the addition of profit and overhead, of such defense and the amount of such taxes, interests and penalties ultimately determined to be due and payable shall be paid directly by Buyer, or reimbursed by Buyer (in the case of such taxes, interest and penalties), or reimbursed by Buyer, in the case of Sellers expenses associated with the contest, defense and/or payment, to Seller. (2) In the event Seller, Buyer, or Buyer's Customer is successful in defending such claim, the amount of such taxes recovered by Seller which had previously been paid by Seller and reimbursed by Buyer or paid directly by Buyer's Customer shall be immediately refunded to Buyer, less actual and direct expenses, without the addition of profit and overhead, associated with such contest or defense.

D. REBATES. If any taxes paid by Seller for Buyer or Buyer's Customer or by Buyer or Buyer's Customer are subject to rebate or reimbursement, Seller shall take the necessary actions to secure such rebate or reimbursement and shall promptly refund to Buyer any amount recovered less any amount provided for in 12.C above. E. INVESTMENT TAX CREDIT AND DEPRECIATION. For U.S. federal income tax or California franchise tax purposes, Buyer's Customer shall be entitled to claim all tax credit and depreciation with respect to all eligible property under this Order based on its equitable interest in such property and regardless of the fact that it may not have legal ownership or legal title in the tooling (e.g., forging dies) and other eligible property in which Buyer or Buyer's Customer has an equitable interest. 13. ADEQUACY OF BUYER OR CUSTOMER FURNISHED TOOLING. Tooling furnished by Buyer or Buyer's Customer is provided as an aid for fabricating parts and does not relieve Seller of responsibility of proving the adequacy of all tooling. Any discrepancy found in such tooling must be immediately reported to Buyer. 14. INSPECTION. Inspection of all tools manufactured or acquired by Seller and/or Seller's subcontractors shall be Seller's responsibility. Tools will be inspected to applicable data (engineering data, engineering drawing, mater layouts, tool designs, tool specifications, control tools, etc.) as specified in the purchase order and prior to release for production use. Seller's Quality system will assure the inspection and recording of all dimensions and features of a tool into an inspection record. Buyer tool inspection is required for all new and replacement tools. Seller will complete all inspections, documentation and assure compliance to all requirements prior to requesting Buyer tool source inspection. All Seller inspection records will be made available for review by Buyer tool source inspection personnel. Seller will provide facilities, equipment and assistance as may be reasonably required by Buyer tool inspection personnel in the performance of their duties. Tools requiring progressive acceptance or incremental release should be identified by Seller and an inspection plan established with Buyer tool inspection. Seller will document all tooling anomalies, request for deviation or wavier, and other nonconformances identified during or subsequent to Seller's tool manufacturing and acceptance process. The nonconformance documentation will become part of the tool inspection package. All equipment used to verify the acceptability of tooling is required to be calibrated and controlled. Seller's responsibility will include function, durability, and accuracy of all tools to produce parts and /or assemblies within the limits of specifications and tolerances of the engineering drawings. Tool source inspection or monitoring by Buyer does not relieve Seller's contractual responsibility nor does it guarantee acceptance of the tool at it's destination. 15. MODIFICATIONS OR CHANGES TO TOOLING. Following first article inspection, Seller shall make no modifications, remakes, or readjustments of established tool registration points without first notifying Buyer's Procurement Representative and receiving written authorization from Buyer to proceed with the intended changes. When approved, Seller shall perform a first article dimensional inspection of the part and forward a copy of the completed first article report and the part used for the first article (tagged with the notation "First Article Inspection Required") to Buyer. Whenever a tool number is changed, a new BLTSN and multiple-unit number will be assigned to the tooling. If an engineering change results in a question of tool rework feasibility, Seller shall review the tool to determine the action to be taken and coordination requirements to related or master tools. Seller must retain sufficient tooling to produce interchangeable items, replaceable items, end-item spares and/or replacement assemblies. When possible, the tool should be reworked to produce the new part and, with minor conversion, the old spare part also. If it is not possible to produce parts to a dual configuration, Seller will notify Buyer's Procurement Representative who will issue instructions whether Seller is to proceed with rework of the existing tool, or retain it for fabrication of additional spares requirements and build a new tool. 16. RESTORATION OF SELLER'S PREMISES AND ABANDONMENT. Unless otherwise provided herein, Buyer or Buyer's Customer: A. May abandon, with written advice to Seller, any tooling in place, and thereupon all obligations of Buyer or Buyer's PAGE 6 OF 7

Customer regarding such abandoned tooling shall cease. B. Has no obligation to Seller with regard to restoration or rehabilitation costs. 17. SUBCONTRACTING. Buyer may at any time during the performance of this Order, review and approve Seller's make-or-buy and subcontract solicitation plan(s) for tooling that: A. Involves Offset Credit; B. Is designated critical by Buyer or Buyer's Customer because of process requirements, manufacturing complexity; or C. Exceeds twenty million U.S. Dollars ($20,000,000) in value (subject to prior written approval by Buyer and Buyer's Customer). Approval or disapproval by Buyer or Buyer's Customer of Seller's make-or-buy or subcontract solicitation plan(s) and any action taken by Buyer or Buyer's Customer in connection with the qualification of subcontractors shall not be construed as relieving Seller of any of its obligations under this Order. 18. SHIPMENTS. Upon shipment of tooling directed by Buyer's Procurement Representative, Seller will: A. Originate appropriate shipping documentation as directed by Buyer s written authorization when tooling under the control of Seller is shipped to another location and the control no longer rests with Seller. Package tools in accordance with the best commercial practice to ensure protection. B. Submit a copy of this documentation to Buyer, upon actual shipment. C. Ensure all tools are clearly and correctly identified on documentation and the packing sheet bears a statement certifying the tools are in a useable condition. Place one copy of the shipping documentation inside the shipping container and attach one copy to the outside of the container. D. Include in tool shipments as required, manufacturing records and/or tool drawings, as instructed by Buyer. E. Advise Buyer, prior to relocation and/or shipment of any tool affecting configuration of an interchangeable end item. PAGE 7 OF 7